Right to be heard in sales during moratorium: affected purchasers and creditors may require impleadment to protect substantive rights.

Impleadment arising from a sale of a secured asset during an operative moratorium is addressed by identifying when third parties whose substantive rights may be affected must be heard. The note applies the necessary-or-proper-party test, stating that persons with a direct interest in the subject asset whose rights could be collateral casualties of ongoing insolvency proceedings are entitled to participate to protect those rights. The practical effect emphasises securing procedural fairness by permitting affected parties to place legality objections to admissions and to contest impacts on the sale.

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Issues: Whether the applicants seeking to protect rights arising from the sale of a secured asset during an operative moratorium should be impleaded in the pending appeal.

Analysis: The applicants assert that a sale of a mortgaged asset occurred while a moratorium arising from an earlier insolvency order was in force and that the subsequent admission of a second CIRP may imperil the purchaser's and bank's rights. Where a civil right is at risk of being affected by ongoing proceedings, persons whose substantive rights may be collateral casualties are entitled to be heard. The need to implead depends on whether the applicants are necessary or proper parties because, in their absence, collateral damage to rights dealt with in the transaction can occur. The court considered that the applicants have a direct interest in the subject-matter (the sold secured asset) and that their participation is necessary to secure justice and to allow them to place before the tribunal contentions regarding the legality of the impugned admission and the potential impact on the sale.

Conclusion: The applications for impleadment are allowed; the applicants shall be impleaded as respondents 3 and 4, the appellant shall amend the memo of parties and serve the appeal papers on the newly impleaded parties within three days, and the impleaded respondents may file objections by 27 March 2026 with rejoinder by 10 April 2026.

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